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Pareto Principle 80/20 Rule: What is the Pareto Principle
The Pareto Principle is also called 80/20 rule. It basically means that 80% of your outcomes come from 20% of your effort or cause. That means 80% of the results come from 20% of the work.
It was given by an Italian economist and sociologist, Vilfredo Pareto. He made this observation in the early 20th century.
You can apply this principle in various aspects of your life or any field that you work in.
What does the Pareto 20 80 rule indicate
There are just so many hours in your day. And as an HR, you always have a lot to do. So, how exactly can you get the most out of everything or every task that you do?
That’s when this 80/20 rule comes into play. If someone told you that you don’t have to put in maximum amount of time into doing something, instead you can just 20% of your energy to do it and try to do as much as you can in it, it just doesn’t get your work doe, but also increases your efficiency—in terms of time, number of tasks, and the quality of the work done.
Plus, the best part is that you’re getting all of it done without really exhausting all of your energy.
So, all in all, you can say that it indicates you can accomplish much more just by giving 20% of your energy properly to a task without getting overwhelmed and still get 80% of the results out of it.
And let’s be honest. No matter how much we try perfection, we can never get a 100% result for anything. So, why not try Pareto 80/20 rule.
Advantages of the Pareto Principle
Pareto Principle has several advantages.
- You can use it to identify the minimum number of factors which are the most effective in helping you achieve 80% of the outcome for your task.
- You can prioritize your tasks and projects based on it.
- You can use it for strategic HR planning and get more done in minimum time.
- You can always count on it to manage your time better.
- You can also use it to help your employees with continuous improvement.
Disadvantages of the Pareto Principle
Anything that has certain advantages is bound to have some disadvantages. Let’s go through then as well. So, here are some of the cons of Pareto Principle:
- You can’t use it without assessing your situation well. Because sometimes, due to overgeneralization, you may apply it to your project. But the split may not work out for you because the dependency on the operations to get the right outcome for your project was different.
- You’ll have to check the context of your situation as every problem and project is different. If you use it without knowing all the factors involved, you may face a loss of time and resources and still not get the right outcome. That will also force you to take all the factors into consideration to know what went wrong, which will lead to extra analysis time along with the hours that you’ll have to dedicate to it again to get it right this time.
- Sometimes the success of a project is dependent on multiple factors. While the Pareto Principle just takes two factors into consideration and that is the result and the cause. If it’s not the case for you, you may need to check again. Because in that case, the 80/20 rule may not apply to you or your situation.
Example of the Pareto Principle: What is 80-20 rule examples
Let’s begin with the first example that Vilfredo Pareto considered while defining this rule. Vilfredo Pareto lived in Italy, and in 20th century, he observed that 80% of the land in Italy was owned by 20% of the country’s population. And that’s how he stated this rule.
Some other examples that we can look at are for instance, 20 percent of the criminals cause 80 percent of the crimes, 80 percent of the traffic accidents are caused by 20 percent of people, or 20% of a company’s employees are responsible for 80% of its growth.
Why is the 80-20 rule often called as the Pareto principle
The 80/20 rule is called the Pareto Principle because Vilfredo Pareto was the person who formulated this principle based on his observation. So, the principle is named after him.